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Unpacking Q2 Earnings: JFrog (NASDAQ:FROG) In The Context Of Other Software Development Stocks


Petr Huřťák /
2022/10/18 3:28 am EDT
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Heading into the new earnings season, we look at the numbers and key takeaways for the software development stocks in Q2, including JFrog (NASDAQ:FROG) and its peers.

Software is eating the world, as Marc Andreessen says, and there is virtually no industry left that has been untouched by it. That in turn drives increasing demand for tools that help software developers do their jobs, whether it is monitoring critical cloud infrastructure, integrating audio and video functionality or ensuring smooth streaming of content.

The 14 software development stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 3.49%, while on average next quarter revenue guidance was 0.45% above consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and software development stocks have not been spared, with share prices down 14.9% since the previous earnings results, on average.

JFrog (NASDAQ:FROG)

With the name chosen due to the founders' fondness for frogs, JFrog (NASDAQ:FROG) provides software as a service platform that makes developing and releasing software easier and faster, especially for large teams.

JFrog reported revenues of $67.8 million, up 39.3% year on year, beating analyst expectations by 3.49%. It was a mixed quarter for the company, with exceptional revenue growth but decelerating growth in large customers.

"During the second quarter, we delivered and exceeded our commitments to the market. Revenue growth in our cloud business accelerated sequentially, showing that hybrid and multi-cloud DevOps is what enterprises are driving at scale. We believe that our success in the second quarter provides further validation that the JFrog Platform is the backbone of their software supply chain,” said Shlomi Ben Haim, JFrog Co-founder and CEO.

JFrog Total Revenue

The stock is down 9.15% since the results and currently trades at $22.02.

Is now the time to buy JFrog? Access our full analysis of the earnings results here, it's free.

Best Q2: HashiCorp (NASDAQ:HCP)

Initially created as a research project at the University of Washington, HashiCorp (NASDAQ:HCP) provides software that helps companies operate their own applications in a multi-cloud environment.

HashiCorp reported revenues of $113.8 million, up 51.5% year on year, beating analyst expectations by 11.2%. It was a stunning quarter for the company, with an impressive beat of analyst estimates and an exceptional revenue growth.

HashiCorp Total Revenue

HashiCorp achieved the strongest analyst estimates beat and highest full year guidance raise among its peers. The company added 30 enterprise customers paying more than $100,000 annually to a total of 734. The stock is down 0.69% since the results and currently trades at $30.04.

Is now the time to buy HashiCorp? Access our full analysis of the earnings results here, it's free.

Slowest Q2: Dynatrace (NYSE:DT)

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Dynatrace reported revenues of $267.2 million, up 27.4% year on year, beating analyst expectations by 2.07%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.

Dynatrace had the weakest full year guidance update in the group. The stock is down 7.38% since the results and currently trades at $35.48.

Read our full analysis of Dynatrace's results here.

New Relic (NYSE:NEWR)

With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.

New Relic reported revenues of $216.4 million, up 19.9% year on year, beating analyst expectations by 1.55%. It was a mixed quarter for the company, with an increase in gross margin but underwhelming revenue guidance for the next quarter.

The company added 38 enterprise customers paying more than $100,000 annually to a total of 1,137. The stock is down 9.18% since the results and currently trades at $55.75.

Read our full, actionable report on New Relic here, it's free.

Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $74.1 million, up 25.9% year on year, beating analyst expectations by 3.57%. It was a decent quarter for the company, with a solid beat of analyst estimates.

The stock is down 12.4% since the results and currently trades at $7.40.

Read our full, actionable report on Sumo Logic here, it's free.

The author has no position in any of the stocks mentioned